Sappi Limited Intentional Evolution

Sappi Limited – Intentional Evolutiondelivering onstrategy2019Vision2020next phasegrowthBeth A. CormierVP- Research, Development & InnovationSappi North America1intentionalevolution

Outline 2Sappi in briefMarket dynamicsSappi intention evolution to dateLooking forward

SAPPI Limited – at a glance3A leading global provider of sustainable wood fibre products and solutions.1818

Sappi Business SegmentsPaper and pulp is core – growth focus:Specialised cellulose, Specialty papers and Biomaterials

Market Trends5 Growth of digital platforms has resulted in long-term structural demanddecline for printing and writing grades Sappi has proactively responded to these demand trends by convertingcapacity into growing markets (packaging, technical papers and dissolvingpulp)

US Coated Paper Demand TrendUS Coated Demand8,0007,000Thousand Tons6,0005,0004,0003,0002,0001,0002001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019EstCoated freesheetCoated mechanicalCoated freesheet demand has declined by 40% and coated mechanical demand by 60% since 20016

Capacity ChangesCoated FreesheetCompanyLocationSappiBiberist, SwitzerlandM-realAanekoski, FinlandM-realHusum, SwedenStora EnsoUetersen, GermanySmart PapersHamilton, OHBurgoAvezzano, ItalyArjowigginsOdense, DenmarkLectaCondat, FranceInternational PaperCourtland, ALSappiAlfeld, GermanyIlim GroupKoryazhma, RussiaLectaZaragoza & Motril, SpainBurgoAvezzano, ItalyNewPageRumford, MESappiNijmegen, NetherlandsPaper Excellence Lenningen, GermanyFutureMarkAlsip, ILSappiStanger, South AfricaArjowigginsWizernes, FranceMetsa BoardHusum, SwedenLectaZaragoza & Motril, SpainAPPJiangsu, ChinaCatalystRumford, MECatalystRumford, MELectaZaragoza & Motril, SpainVersoWickliffe, KYCatalystRumford, MEMoorimJinju, South KoreaHansolOsan, South KoreaStora EnsoSuzhou Mill, ChinaVersoJay, MESappiLanaken Mill, BelgiumAppleton Coated Appleton, WIWest Linn Paper West Linn, ORSappiSomerset, MENet Change7Source: Midland, RISIAnnual NetChange(tons)DateComment(479,000) Q2 11 Ceased CFS production at mill(220,000) Dec-11 Closed PM260,000 Q1 12 Shift from Aanekoski mill(154,000)2012 Shift to specialty paper(42,000) Feb-12 Shut last PM at mill(132,000) Jul-12 Shut PM1(120,000) Dec-12 Mill closure(99,000) Jul-13 Shut PM6(116,000) Q4 13 Mill closure(165,000) Q4 13 Shifted PM2 to specialty paper77,000 Q4 13 New PM7 and coater(40,000)2014 Shift to specialty paper(165,000) Jan-14 Shut PM2(45,000) Feb-14 Indefinitely idled PM12(265,000) Jun-14 Mill sold to AIAC to produce specialty paper(176,000) Jul-14 Idled PM6(35,000) Sep-14 Mill indefinitely idled(88,000) Dec-14 Transition to uncoated(187,000)2015 Mill closure(66,000)2015 PM8 shift to packaging(66,000)2015 Shift to specialty paper(198,000)2015 PM closures45,000 Jan-15 PM12 restarted(65,000) Sep-15 PM12 indefinitely idled(56,000)2016 Shift to specialty paper(215,000) Apr-16 Mill closure58,000 May-16 PM12 restarted(114,000) Q2 16 PM closures(103,000) Q2 16 PM closures(265,000) Q4 16 PM closures(50,000) Q1 17 Shut PM3 (restarted on linerboard in 2018)220,0002017-2019 Transition from CGW to CFS(280,000) Oct-17 Mill shut (partially reopened in 2018 on other grades)(267,000) Oct-17 Mill shutQ2 18 PM1 conversion to packaging(3,813,000)Coated MechanicalAnnual evens Pt, WI(247,000) Feb-11 Whiting Mill closedHolmenMadrid, Spain(187,000) Mar-11 Idled PM61OjiFuji, Japan(71,500) Apr-11 Shut PM1Rainbow Papers Mehsana, India134,500Q3 11 Started 2nd hand machineSun PaperYanzhou Mill, China385,000Q3 11 New PM24VersoBucksport, ME(90,000) Oct-11 Shut down PM2Myllykoski/UPM Anjalankoski, Finland(232,000) Dec-11 Mill closureMyllykoski/UPM Albbruck, Germany(353,000) Jan-12 Mill closureNorske SkogHonefoss, Norway(154,000) Mar-12 Mill closureResoluteCatawba, SC(125,000) Jun-12 Indefinite shut - PM1VersoSartell, MN(180,000) Aug-12 Mill closureGuangxi Tianyi Fangchenggang Guangxi, China165,0002013 Started 2nd hand machineTan MaiKontum, Vietnam220,0002013 New machineUPMStracell, France(297,000) Jan-13 Ceased production of coated paperInvestlepram KamaKrasnokamsk,P&PRussia95,000 Mar-13 Restarted PM3Norske SkogWalsum, Germany(248,000) Dec-13 Shut PM4Stora EnsoCorbehem, France(364,000)January 2014 Mill closureNewPageRumford, ME(22,000) Feb-14 Indefinite shut - PM12Stora EnsoVeitsiluoto, Finland(209,000) Mar-14 Shut PM1Norske SkogTasmania, Australia154,000 Apr-14 Converted PM2 from newsprintFutureMarkAlsip, IL(124,000) Sep-14 Mill indefinitely idledVersoBucksport, ME(350,000) Dec-14 Mill closureMetsa BoardHusum, Sweden(132,000)2015 PM8 shift to packagingCatalystRumford, ME(47,000) Sep-15 PM12 indefinitely idledVersoJay, ME(150,000) Q4 15 PM2 shut downBurgoDuino, Italy(165,000) Dec-15 Permanent closure, PM2KotkamillsKotka, Finland(198,000) Jan-16 Permanent closure, PM2CatalystRumford, ME41,000 May-16 PM12 restartedNorske SkogWalsum, Germany(225,000) May-16 Permanent closure, PM10ResoluteCatawba, SC(200,000) Jul-17 PM2 shut downUPMKaukas, Finland(248,000) Q1 17 Shut PM2VersoJay, ME(150,000) Q1 17 Shut PM3 (restarted on linerboard in 2018)UPMGrand Rapids, MN(128,000) Q1 18 Shut PM5Net Change(3,702,000)

NA Capacity Share by Producer – Coated Freesheet1997CurrentWi l lamette, 60Boi se 50Ca scade, 42 Wa usau,Georgia24Pa cific, 20 Moha wk, 13Pl a inwell Paper,Crown Va ntage, 5Uni on Ca mp, 50 Ga l laher, 40Gl a tfelter, 97Domtar, Ca s ca des, 120123 E.B. Eddy, 131Wes t Li nn, 171Sa ppi, 1,045Temple, 175NineDragons,281Si mpson, 249Sappi, 1,221Wes tva co, 718Appl eton, 280Potl a tch, 410Cons olidated Pa per, 712Verso, 1,447International Pa per,619Cha mpion, 6226.4 million tons8Source: RISIMea d, 6402.9 million tons

Global Textile Fiber DemandCAGR 2018 - 23Total Fiber: 3%Wood based: 5%9Synthetic: 4%Cotton: 1%Other: 0%

Wood based fibers - the natural ble10

Cellulosic fibre properties helping drive growthKey strengthNonwovens/Technical textilesQualifiesHome textilesIssueApparelFibre properties and applicationsCellulosic fibresCotton72721ApplicationsFunction andfeelAppearanceSustainability28526620Durability Absorbency Breathability Softness Drape Dyeability Brightness/Lustre Renewable and biodegradeable Resource efficiency Overall value propositionSource: IHS Global, RISI, Hawkins Wright.111762Polyester Natural and attractive,‘greener’ alternative to cotton Natural, functional andwell established Cheap, durable andversatile On a pureproperty basis,cellulosic fibresare superior tocotton anddifferentiatedonsustainability. Polyester isdifferentiatedon strength/durabilityversus cottonand cellulosicfibres.

Folding Carton Demand ForecastUS Bleached Board Folding Carton Demand2.001.901.80Million 20202120222023Sappi has shifted one Somerset machine from declining coated freesheet market to growing foldingcarton boxboard market12

Sappi North America History of InvestmentCloquet pulp millconversion to SC,including PM4 wetend rebuildSheeterrelocation toCloquet20102011Somerset PulpMill/RecoveryUpgrade13132012CloquetPM12 wetend rebuild2013SomersetPM3 Formerrebuild2014Westbrook#20 CoaterrebuildSomersetNatural GasConversioncompleted2015Cloquet de2016Cloquetlime kilnrebuild20172018SomersetPM1conversionto boardMatanemillacquired2019Cloquet pulpmill capacityexpansion

Strategic Priorities by BusinessGraphicsPackagingDWPOptimizeEstablish and GrowGrow with Customers Scale Pulp integration Share and scale Pulp integration Barrier coatingReleaseBio-BusinessShift from Chinagarment industryLaunch Functional textures Pulp integration14 Cost competitiveness Sustainability Biomaterials Sugars to biochemicals

Legacy Packaging15LusterPrintBag applicationsPet food, theater popcornSeed pack, coffee bagLusterCoteLitho labelCut & StackYogurt banderole

PaperBoardSpectroProtoLusterFSB16 High Bright Luxury Packaging Commercial Printing Folding CartonLitho LaminationFood Service Cup Plate/Bowl

Invented Ultracast technology. This launched theindustry standard, the only release paper capable of100% pattern transfer for the casting industry.Development1979Developed andpatented high solidsblade coatingtechnology1980Developed Ultracast(ability to imparthigh fidelity microtextures on paper)1978Modified a papermachine for in-linecoater and softcalender1970First high bulkto weight coatedpaper–Warrenflo1965Developed andpatented the automaticfinishing machinefor sheeting paper andstacking in-line1958Developed in-lineresilient rollcalendering

Release PapersWestbrook MillLeather Upholstery – Auto Interiors –Handbags – Counter Tops – LaminateCabinets – Flooring – ShoesSport Shoes – Car Wrap – Pads & Foams– Motorcycle SeatsEvery day, almosteveryone here todaytouches a texture thatwas created bySappi’s Release PaperBusiness.

In development .Microscopic Biomimicry

Sappi biotech: entering adjacent value chainsBio value chains20

Cellulose MorphologyCancer cell or bacteriaØ 15-25 µm(Macroscale)Ø 10-100 nmØ 200-600 nmSymbioHuman hair (80-100um)Ø 4-30 nmAnti-body or virusØ 3-7 nm21

Slide 22Engineered Fibers

Cellulose MorphologyCancer cell or bacteriaØ 15-25 µm(Macroscale)Ø 10-100 nmØ 200-600 nmSymbioHuman hair (80-100um)Ø 4-30 nmValidaAnti-body or virusØ 3-7 nm23

Valida ApplicationsBiobased compositeImproving the mechanical properties of rubber,latex, thermosetting resins, soy protein andstarch-based matricesPaperImprove paper strengthPackaging and barrierPaint and adhesivesEnhancing barrier coatings onpackaging materials to prolong shelflife of foodThickening, stabilisingCosmeticsA powerful and natural rheologymodifier in personal care products24FoodEffective rheology modifier and activeingredient release

Cellulose MorphologyCancer cell or bacteriaØ 15-25 µm(Macroscale)Ø 10-100 nmØ 200-600 nmSymbioHuman hair (80-100um)Ø 4-30 nmValidaAnti-body or virusØ 3-7 nm25

Sugars to biochemicals – Sappi DemonstrationA Hydrolysate (sugars, acids, lignin)B Balance of spent cooking liquor - reusedA BPulping can yield a stream of sugar rich materialOpportunity for lignin extraction as wellFocus on Bio-chemicals

EVOLUTIONSamuel D. Warren purchases Cumberland Millsand a long history of development begins1854Mill Exterior ca. 1880

28New to Sappi &WorldNew ProductsSappi Biomaterials PipelineNano-celluloseChemicals & Ffuels from woodChemicals from CligninFibre compositesCNovelNpackagingCurrentproductsC Commercial lignin businessFirst generation fibre composite productsDemo plant for nanocelluloseDemo plant operating for 2G sugarsTechnology scoping for Westbrook

One thing I hope you take away . Two most abundant polymers on earth – cellulose and lignin – both renewableChemistry, Biochemistry & bio-engineering have advanced in ways we canmodify these wood polymers for higher value Social momentum toward more sustainable material use Educate today’s youth on the vast opportunities in the forest products industry 29Paper for plasticBio forms of chemicals vs. fossil fuel basedProcess sustainabilityWe must step up our game

Thank you30

Oct 23, 2019 · Appleton Coated Appleton, WI (280,000) Oct-17 Mill shut (partially reopened in 2018 on other grades) UPM Grand Rapids, MN (128,000) Q1 18Shut PM5 West Linn Paper West Linn, OR (267,000) Oct-17 Mill shut Sappi Somerset, ME Q2 18PM1 conversion to packaging Net Change